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The Journal Gazette

  • Associated Press photos The February price of Alphabet stock is shown at the Nasdaq MarketSite in New York. Following a $2.7 billion fine levied by the European Commission on Google's parent company, Alphabet reported second-quarter earnings of $3.52 billion, down 28 percent from a year earlier.

  • Google was fined $2.7 billion by the European Commission for directing online consumers to its Google Shopping service, pushing rivals down the list of search results.

Tuesday, July 25, 2017 1:00 am

Google's difficulties in Europe

$2.7 billion fine might just be first levied on company

RYAN NAKASHIMA | Associated Press

SAN FRANCISCO – Google's parent company Alphabet can easily afford the $2.7 billion write-down it's taking to cover a big antitrust fine in Europe. But it might find it more difficult to shrug off the rest of the European regulatory assault that's headed its way.

In June, a European Commission ruling slapped down Google for abusing its market dominance in search by unfairly directing visitors to its comparison shopping service, Google Shopping, to the detriment of its rivals. The regulators not only imposed a huge fine, they also insisted that Google change the way it provides search results in Europe.

Alphabet is still mulling an appeal of that ruling, but it could take years to get a ruling at the European Court of Justice. And that case is only the first of several such investigations that have embroiled Google in Europe, a situation that is raising uncertainty about its ability to operate freely on the continent going forward.

Alphabet Inc. reported second-quarter earnings were $3.52 billion, down 28 percent from $4.88 billion a year earlier; that figure includes the effect of the $2.7 billion European fine. Revenues rose 21 percent to $26 billion after subtracting commissions it paid out, up from $21.5 billion.

Google faces the prospect of additional fines if it doesn't change the way it displays Google Shopping results in Europe by late September.

“These things tend to hobble a company's behavior even if there isn't a decision,” says Jonathan Taplin, a former professor at University of Southern California and author of “Move Fast and Break Things: How Google, Facebook and Amazon Have Cornered Culture and Undermined Democracy.” ''I don't think it's the end, I think it's the beginning.”